Adam's Spinning Top is the second sculpture in the plaza, created from bronze with perforated text in English. The artist chose text from the writings of Adam Smith, an economic theorist and John Maynard Keynes, a 20-century theorist for the sculpture. The artwork stands as a metaphor for the importance of a healthy economy and an invigorated mind.

During the current economic crisis, I am often reminded of some of the other sculptures by James Sanborn (Kryptos creator), such as the multiple sculptures entitled "Adam Smith's Spinning Top". I see the economy spinning and moving along. The faster the movement, the more stable the top, and the stronger the economy. The movement is caused by everyone: Businesses, banks, government, individuals buying and selling. With the economy moving along at a good clip, everyone buying and selling, things are good. But right now, people are hunkering down, and not buying and selling. People are scared, are more likely to save than spend, and the top is slowing down more and more. Which affects everyone, as the economy weakens. The money to get it moving again is there, but people are reluctant to help push it along, because they're more concerned for their own finances, which, ironically, makes their own finances worse.

Ideas are needed to get the top moving again, and spinning at a healthy rate. Which means people need to be confident enough to spend some money. For each dollar spent, that dollar keeps moving, and affects multiple other people. I may go to a restaurant and enjoy a nice meal of sushi. The money I spend goes to the waitress, and the restaurant owner. They send the money along to their food suppliers. The waitress spends the money on clothes for her kids. The food suppliers spend the money going to a movie. The theater pays salaries to its own employees. Those employees may logon to the internet to play a subscription game, and that money comes back to me, so I can keep going out to sushi. ;) But the money's gotta flow, or everyone suffers.

Idea: To help the economy, change the Roth IRA early withdrawal penalties

Topic: Miscellaneous

2:05 pm EST, Feb 18, 2009

There are already a few exceptions to avoid early withdrawal penalties on an IRA:

The early withdrawal penalty does not apply to distributions that:

1. Occur because of the IRA owner's disability. (This can be a very narrow definition, so if you get a severe paper cut, don't consider a Roth IRA distribution for a disability until you review IRS Code Section 72(m)(7) and IRS Publication 590.) 2. Occur because of the IRA owner's death. 3. Are a series of "substantially equal periodic payments" made over the life expectancy of the IRA owner. 4. Are used to pay for unreimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI). 5. Are used to pay medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks. 6. Are used to pay the costs of a first-time home purchase (subject to a lifetime limit of $10,000). 7. Are used to pay for the qualified expenses of higher education for the IRA owner and/or eligible family members. 8. Are used to pay back taxes because of an Internal Revenue Service levy placed against the IRA.

However, with the economy worsening, these exceptions should probably be expanded. There are plenty of people with substantial funds in their IRAs right now, but they're reluctant to touch the money because of the withdrawal penalties. However, if the penalties were temporarily waived, people could be more comfortable about accessing the cash, spending would increase, and it would help get "Adam Smith's spinning top" of the economy moving again.

ILO: Unemployment, working poor and vulnerable employment to increase dramatically due to global economic crisis

Topic: Miscellaneous

1:57 pm EST, Feb 18, 2009

From the International Labour Organization, January 28, 2009:

The global economic crisis is expected to lead to a dramatic increase in the number of people joining the ranks of the unemployed, working poor and those in vulnerable employment, the International Labour Office (ILO) says in its annual Global Employment Trends report.

Based on new developments in the labour market and depending on the timeliness and effectiveness of recovery efforts, the report says global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate.

The ILO report also said that in this last scenario some 200 million workers, mostly in developing economies, could be pushed into extreme poverty.

“The ILO message is realistic, not alarmist. We are now facing a global jobs crisis. Many governments are aware and acting, but more decisive and coordinated international action is needed to avert a global social recession. Progress in poverty reduction is unravelling and middle classes worldwide are weakening. The political and security implications are daunting”, said ILO Director-General, Juan Somavia.

...

The number of working poor – people who are unable to earn enough to lift themselves and their families above the US$2 per person, per day, poverty line, may rise up to 1.4 billion, or 45 per cent of all the world’s employed.

At least in the United States, laid off workers have social services and safety nets. Unemployment insurance, COBRA to continue medical benefits, etc. In other countries, things are much much worse.

The number of Americans filing for unemployment benefits may have hit a 26-year high, but there are still lots of jobs open, because no matter how grim the economic forecast, at least some workers will change jobs voluntarily or retire. "Companies may not be making expansionary or discretionary hires," says Marc Cenedella, founder of TheLadders.com a subscription service that lists only jobs that pay $100,000 and up. "But even in a downturn, there's still 20% to 25% natural turnover per year." In the six-figure category, he estimates that will mean 3.2 million hires a year instead of 4 million in a normal market.